November 04, 2016
An important decision, not a critical one
Yesterday's ruling by the UK's High Court is not nearly as important as the newspaper headlines this morning suggest, and it certainly does not mean a reversal of Brexit, or anything of the kind. It is not even clear whether it means a softer or harder Brexit. One can draw up scenarios that would support both theories. But it means that the process towards Brexit is going to get a touch messier, and early elections are now - for the first time - becoming a real possibility.
The ruling supports the view of the plaintiffs that the government will need to consult the British Parliament. The court did not specify the nature of this consultation, but much of this debate was short-circuited last night when Theresa May said the logical conclusion of this verdict, if upheld, would be the need to pass an act of parliament before Article 50 can be triggered. The government will appeal to the Supreme Court, which will hold hearings on December 7 and 8. May has arranged for a telephone call with Jean-Claude Juncker this morning to reaffirm that this ruling should not be interpreted in any way as weakening the UK's determination to leave.
We should not prejudice the outcome of the Supreme Court's ruling. The High Court applied legal principles, but the Supreme Court tends to include political considerations in its rulings as well. In this case, these would be the impact of the decision on the court itself, and on the separation of powers between the government and the judiciary. If the Supreme Court upholds the High Court's decision, it will further flesh out the details of what form the consultation would have to take.
So, what are the scenarios?
Assuming the Supreme Court upholds the High Court's ruling in full, the government will introduce Article 50 legislation. it is hard to imagine that the House of Commons would vote against triggering Article 50. Such action would very likely result in another election - through either a no-confidence vote, or a two-thirds majority in the parliament, to satisfy the conditions of the Fixed Term Parliaments Act. May is expected to win such an election with an enhanced majority, especially given the robust performance of the economy. In this case, it would take longer for the UK to trigger Article 50, but we would expect a much harder Brexit as a result.
Alternatively, the parliament could accept Brexit, but demand a softer version. That may well work for May for the simple reason that a soft version may not be on offer by the EU. The parliament may be able to influence the government's negotiating position, but not the EU's. But what if the EU were to offer an EEA-type agreement, as part of which Britain retains membership of the single market, while respecting freedom of movement?
A third possibility is that the Supreme Court upholds the High Court's ruling, but with a rather softer set of conditions. The government may have to consult parliament, but not be under an obligation to pass legislation.
If the Supreme Court overturns the High Court's ruling, nothing will change.
Sebastian Payne notes that Remain supporters should not be under any illusions that the court ruling can force a U-turn on Brexit. In the worst of all circumstance, May will simply trigger an election:
"If Mrs May’s government loses the appeal and finds the Commons troublesome, it might decide to put the question to the country, particularly if a drawn-out parliamentary debate hits up against its timetable of triggering Article 50 by March. Based on the latest opinion polls, this would result in a landslide victory for the Conservatives, which would again not change the fact that Britain is heading out of the EU."
It is interesting to note that there is still constant talk among ex-Remainers about frustrating the Brexit process. We think this talk is extremely counter-productive because it reduces the probability of an EEA-type agreement. One of the incessant second referendum campaigners is John Kerr, a former UK ambassador to the EU and one of the co-authors of Article 50. He said it was not meant to be used, only inserted for a situation in which a country turns into a dictatorship. He made one point we had not heard before - that it is possible to leave the EU without recourse to Article 50. Indeed this was always so, even before the Lisbon Treaty:
"If you stopped paying the bills and you stopped turning up at the meetings, in due course your friends would notice that you seemed to have left."
And finally, Angela Merkel has hinted that the EU might be ready to do a deal with Switzerland, now that Bern has accepted a much weakened form of immigration control solely in the form of a rule to offer vacant jobs to Swiss citizens first. Merkel is now trying to ensure that this does not constitute a precedent for the Brexit discussions, which is, of course, illusionary. Once you give up on the principle of freedom of movement, you have weakened your negotiating position. This is Merkel's version of having her cake and eating it:
“If I tried to put myself in the shoes of a Swiss citizen, I wouldn’t be pleased if it was suddenly cast in a new light because of another decision in another country...That’s why we should conduct these talks with Switzerland as if the Great Britain issue never existed. I can only say that the German position hasn’t changed with Great Britain’s decision. These are two completely different issues.”